Technology Diffusion Through Trade- growth possibilities for developing countries

Abstract: In this thesis recent data on trade between 23 OECD countries and the non-OECD countries, singling out six low or lower middle income countries (Brazil, China, India, Indonesia, Philippines and Thailand), is examined to detect possible technological diffusion which might, according to recent theories on economic growth, lead to an increased growth in the countries in question. Data on total trade and trade in machinery and equipment, an economic sector that is much likely to contain a large amount of technology, is collected and studied in order to see how this might indicate a facilitation of technological spillovers. Further, data on research and development is added to the survey to calculate some measures on possible technological diffusion and to see if there is a difference in the indication of growth given what measure one chooses to use. Finally data on education is presented to see how the human capital, which is an important factor for growth and which is important for the requisition of the possible technology diffusion that takes place, can indicate possibilities for higher growth in the six developing countries included. The results presented show that all data, irrespective of which measure one chooses to use, points towards an increase in growth and facilitation for technological diffusion between the OECD countries and the developing countries included in the study. There are some differences in the level of the increases but over all there is a positive picture regarding possible technological spillovers and growth. Also when it comes to data on human capital, here presented as average years of schooling, it points towards a positive development for the six different countries. However, a faster increase in average years of schooling might be desired for one of the developing countries, namely China, and a higher level of education for another, Brazil.